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When lawmakers first passed legislation allowing slot machines in West Virginia in the 1990s, the underlying reason for doing so was to resuscitate the state’s moribund horse racing industry.
Deeming parimutuel racing “a valuable tourism resource” that provides “significant economic benefits to the citizens of this state through the provision of jobs and the generation of state revenues,” legislators passed the Racetrack Video Lottery Act, allowing slots at the state’s existing racetracks and designating a portion of the gambling proceeds to racing purses and thoroughbred breeding development funds.
Years later, with the racing industry threatened again, this time by encroaching casino competition from neighboring states, the legislature passed the West Virginia Lottery Racetrack Table Games Act in 2007 to help “protect and preserve” those same racing and breeding industries, which lawmakers said “play a critical role in the economy of this state” and form “an integral part of West Virginia’s agriculture.”
For years, the plan worked. Purse and development fund revenues soared and the racing and breeding industries in West Virginia reached new heights in terms of both overall numbers and quality of racehorses.
But the local thoroughbred industry now finds itself at a crossroads, and horsemen have good reason to be skeptical that lawmakers meant what they said about the importance of the industry to the state’s economy and its continued existence in West Virginia.
While gambling receipts have dropped considerably in recent years and continue to put the hurt on the racing industry, the original legislation first-enacted as a lifeboat has been modified several times since its passage, ultimately serving to reduce the percentage of ever-dwindling gambling revenues going to purses.
In 2001, the legislature revised the allocation schedule to designate a larger portion of any revenue exceeding that year’s levels to go to the state government, with reduced shares going to the racetracks and purses.
In 2005, lawmakers established the Workers’ Compensation Debt Reduction Fund and funded it in part by reducing the percentage of revenue going to purses by allocating half of the purse share – up to $11 million per year – to reduce the state’s workers’ compensation debt. As of fiscal year 2013, $88 million had been allocated to the debt fund.
In 2009, the legislation was again revised to allow racetrack operators to deduct promotional play credits from gross terminal income, leaving a reduced share of revenue to be split between the remaining stakeholders, including purses and breeder development funds.
And just this past week, the House of Delegates voted to reduce by 10 percent the share of lottery funds – which includes traditional lottery games as well as slot machines and table games – dedicated to various aspects of the state’s horse racing industry.
Of course there are those who will say that if after 20 years and hundreds of millions of dollars in subsidies racing can’t sustain itself, it never will and it is time to pull the plug.
After all, the state is facing a projected $146 million budget shortfall and coal severance taxes and casino gambling receipts aren’t what they used to be. That money could be better spent than serving as life support to some anachronism well past its prime.
Yet such thinking misses the larger point, while also ignoring the tangible assets the industry possesses, including those once championed proudly by lawmakers in the preambles of the aforementioned legislation.
Horse racing is big business in West Virginia. The industry factors heavily in the state’s agricultural sector and its ancillary impacts as a green industry and protector of open space register far and wide, especially in racetrack counties such as Jefferson County. Thousands are employed and the state government, as well as those in counties and municipalities, collects large sums in taxes by virtue of related business transactions.
But beyond that, the very existence of casino gaming in West Virginia owes itself to promises made long ago to help protect and enhance the racing industry. Casino gambling would not have passed at the time without the support of the racing industry.
Priorities do, in fact, change over time and new circumstances present themselves on a regular basis. But is it too much to ask lawmakers to mean what they say and keep their word? Perhaps it is. But if that is the case, then the state will be worse off as a once-proud and vibrant industry is steadily whittled away.